The present invention relates generally to electronic financial transactions. More specifically, the present invention relates to an electronic statement presentment system that allows a biller to direct a statement or invoice electronically to a consumer.
Millions of consumer make monthly payments to utilities, merchants, banks, and other service providers (xe2x80x9cbillersxe2x80x9d) by check, with a small number of consumers using electronic banking services. The term xe2x80x9cconsumerxe2x80x9d as used herein broadly refers to any person or entity paying a bill, be it a utility customer, a taxpayer paying a tax, a borrower repaying a loan, a state or government paying a bill, a person receiving a statement of account from a bank, brokerage firm, etc.
Billers, who often are billing small amounts with each transaction, incur the costs of processing many checks and the attendant overhead of dealing with paper remittance coupons and envelopes. Given the economy of scale, a biller has great incentive to reduce the cost of remittance processing, and an even larger incentive to reduce the cost of xe2x80x9cexception items.xe2x80x9d An exception item is a payment that, for some reason, cannot be processed according to the highly automated procedures put in place by the biller to quickly process the remittances. Exception items include checks received without payment coupons, payment coupons received without checks, checks for amounts different than the amount shown on the coupon, multiple payments received in an envelope with a single check, etc. Whereas the cost to a biller to process a properly submitted remittance may be $0.10 per item, an exception item transaction might cost as much as $0.65 to $1.50. Billers, therefore, have a large incentive to minimize the number of exception items.
Various prior art electronic bill payment services exist (including electronic banking, bill payment service bureaus, banks, etc.), but generally increase the cost per item to the biller as well. These prior art electronic bill payment services include services offered by Bank of America, Wells Fargo, CheckFree, and through software products such as MS Money and Quicken. Unfortunately, when a consumer decides to try an alternate form of remittance using these electronic bill payment services the cost to the biller increases dramatically because such a remittance is typically an exception item to most billers today. A bill payment service provider offers a bill payment services to consumers whereby the consumer directs the service provider to make payments to the biller. Since the payment origination is usually done electronically, the remittance is not presented to the biller in the usual way with a check and a payment coupon in the biller provided envelope. Instead, the biller usually receives a check printed by the service bureau showing the consumer""s account number and other data. In some cases, the biller is presented with a check along with instructions to credit the amount of the check to the consumer""s account. In other cases, the payment is an electronic transfer where the consumer""s account information is included in a list of payments from multiple consumers.
In any case, these transactions are exception items to the biller since no payment coupon is presented, thus entailing additional costs to billers. Furthermore, large bill payment service bureaus may have many consumers using their service and paying bills to the same biller. Unfortunately, that biller will often receive one check for many customers accompanied by a list of account numbers and amounts for consumers whose remittances are part of the single check. The biller must then go through the list manually to verify the account numbers are correct, and then capture the data to its accounting system. Furthermore, a biller with thousands of customers may have to deal with a large number of electronic bill payment services (that is, many service bureaus or banks) directly. The logistics of dealing with many different electronic bill payment services and keeping track of consumers, their account numbers, and with which electronic bill payment service they are associated, increases the cost of processing remittances by the biller.
One technique for addressing the above inefficiencies in bill payment is shown in FIG. 1. FIG. 1 illustrates an electronic bill payment environment 10. Environment 10 allows a consumer 12 to easily pay a bill via electronic means to any of a number of billers 14. Operating regulations 16, contractual arrangements, or rules, govern the actions of the parties within the overall environment, and an electronic payment system 18 performs the actual transfer of an electronic bill from a consumer financial institution 20 to a biller financial institution 22. Once consumer 12 receives a bill in the mail, the consumer interacts with financial institution 20 to direct that the bill payment be sent to biller 14. Electronic payment system 18 manages the transfer of the electronic payment from consumer financial institution 20 to biller financial institution 22. Electronic payment system 18 may take a variety of forms for transferring electronic payments. By way of example, a suitable electronic bill payment system 18 is disclosed in U.S. Pat. No. 5,465,206 entitled xe2x80x9cElectronic Bill Pay Systemxe2x80x9d, commonly owned by the assignee of the present application, which issued on Nov. 7, 1995 to Hilt, et al. This patent is hereby incorporated by reference in its entirety. Although an electronic bill payment environment 10 including an electronic payment system 18 may be implemented in a variety of ways and managed by any entity, FIG. 1 provides an example of such an environment 10 that is coordinated by Visa International Service Association (hereinafter xe2x80x9cVISAxe2x80x9d) of San Mateo, Calif. In one specific embodiment, electronic bill payment system 18 is the Visa ePay system.
Electronic payment system 18 includes technical platform 24 (hardware and software for implementation), biller reference file 26 (such as a universal biller file, or UBF, of U.S. Pat. No. 5,465,206), and service infrastructure 28. In the Visa ePay system embodiment, a global clearing and settlement system termed VisaNet is used to assist in administration of electronic payment environment 10. Through use of electronic payment environment 10, consumer 12 is able to quickly and easily send payment and accounts receivable information 30 to biller 14 in a manner that reduces the costs associated with handling these payments to biller 14.
Such an electronic payment system 18 provides a variety of advantages. It is an interbank system that facilitates information exchange between banks and adds value to that exchange. It allows a financial institution on either end to maintain relationships with consumers and/or billers and to provide branded services to those consumers and/or billers. That is, the internal operation of electronic payment system 18 and the presence of its coordinating entity are invisible to consumers and billers. It allows a biller to deal with a single financial institution and minimizes exception items because the electronic bill payments come with consumer authorized payment instructions that are not viewed as exception items. Such an electronic payment system has advantages for financial institutions as well such as supporting electronic payment initiatives, providing standards and operating regulations, providing robust and error-free electronic data, and increasing value to the financial institution""s customers.
However, even though a biller is provided with an electronic means to receive payments from consumers, there still exists the problem of delivering statements and invoices efficiently to consumers. It is important for a biller to deliver an invoice to a consumer so that the consumer may then pay the bill presented in the invoice. An invoice is typically a bill presented to a consumer for services rendered or service units accumulated. A statement might be delivered to a consumer to update the account status for that consumer, and includes bank accounts, brokerage accounts, etc. The term xe2x80x9cstatementxe2x80x9d. will be used broadly herein to denote not only invoices and statements of any form, but other information product that a biller, merchant or other entity desires to deliver to a consumer to update the consumer as to the relationship between biller and consumer.
Currently, invoices in particular are received by consumers through the mail. The cost to a biller in preparing and mailing an invoice to a consumer is a large per unit cost. These costs include the paper for the invoice, any enclosures, the envelope, postage, printing, data management, etc. Similarly, the costs associated with preparing and mailing any type of statement to a consumer can also be quite high. Billers have a large incentive to try to reduce this high cost of mailing statements and invoices. Furthermore, receipt of a paper invoice in the mail does not necessarily encourage a consumer to reply using an electronic bill payment system such as described above. Billers would prefer that a consumer use an electronic bill payment system to pay an invoice to save the biller money.
Other alternative techniques exist for providing invoices to consumers, but suffer from drawbacks. For example, CheckFree provides a service by which a consumer receives an electronic invoice from CheckFree over the Internet. Using the Internet, the consumer must log into the CheckFree Internet site in order to access the consumer""s invoice and direct that it be paid. However, this technique requires that CheckFree establish a relationship with each biller that it supports, and also with all of the consumers for that biller. From the biller""s perspective, this is not an extremely desirable situation. For one, it is unlikely that every single one of the biller""s customers will sign up with CheckFree. Unfortunately, the biller must establish and maintain a relationship with each of these electronic invoice services. Thus, the invoices that a biller sends out must be sent to a variety of independent services for later distribution to the biller""s customers. Such a spread out relationship among service providers is difficult and costly for a biller to maintain. Also, as each service may be a separate, independent company, there are no overarching operating regulations to bind all of the parties and to ensure that the biller will receive consistent, quality services. In addition, current electronic invoice services (such as CheckFree) do not allow generation of EDI 810 electronic invoices as required by such organizations as the U.S. Government""s General Services Administration (GSA).
Therefore, the above shortcomings of current statement and invoice delivery approaches demonstrate that an improved means of delivering statements and invoices to consumers is needed. Such an improved delivery means would leverage existing systems (such as existing electronic payment bill systems and clearing and settlement systems), and would provide standards and regulations to ensure consistent and quality service.
To achieve the foregoing, and in accordance with the purpose of the present invention, an electronic statement presentment system is disclosed that allows billers and other entities to efficiently and cost effectively deliver electronic statements to respective consumers of their services and products.
The present invention replaces the printing, stuffing and mailing of paper statements with the power and efficiency of electronic delivery. Billers are provided with the capability to create statements with custom, personalized marketing messages based upon their customer""s characteristics. Statements may have the same xe2x80x9clook and feelxe2x80x9d as paper statements, as well as extended capabilities to include: full motion video; audio; graphics; and custom enclosures based on customer demographic or usage profiles. Statements are segmented into mandatory and optional components to minimize download time and thereby enhance the consumer experience. Electronic statement presentment provides for security and privacy of the information by transporting and delivering statements through a secure network.
Although the present invention may operate stand-alone, in one embodiment of the invention the electronic statement presentment (ESP) system is an enhancement, or is complimentary to any suitable electronic bill payment system. In one specific embodiment, the ESP system is an enhancement to the electronic bill payment system described in U.S. Pat. No. 5,465,206, and in particular may be integrated with VISA""s ePay system to provide full-circle electronic financial transactions for billers and consumers. By introducing electronic statement presentment to an existing electronic bill payment system, an added dimension enables fully automated bill payment. In addition, any suitable electronic remote banking service provided by a financial institution is also enhanced. By integrating the ESP system of the present invention into an electronic bill payment system, a fully electronic payment system is provided that enables processing controls, transaction completion certainty and item resolution. These features are not possible in the traditional paper-based process that uses either the post office or a courier to deliver paper statements.
The present invention provides a variety of other advantages. For one, electronic statement presentment reduces the mailing costs for billers on a per unit cost. By delivering statements electronically and automatically, the costs associated with preparation and mailing of a paper statement are greatly reduced. Also, by presenting an electronic statement to a consumer, the chances are greatly increased that the same consumer will take advantage of an associated electronic bill payment system, thus further reducing costs to the biller. Furthermore, the present invention is able to send electronically a variety of statement and invoice types (or other information products) from a business entity to a consumer.
In one embodiment of the invention, an electronic statement originates from a biller or biller service provider (BSP) and is transmitted to a consumer financial institution (such as a bank) or a consumer service provider (CSP). Delivery of the electronic statement to such a bank and not directly to a consumer allows the bank to maintain its established relationship with that consumer and provides a simpler solution for billers who do not need to deal directly with a variety of electronic service bureaus. By offering a single, comprehensive electronic statement presentment system able to route statements from billers to any consumer financial institution for delivery to any customer of that biller frees a biller from the difficulties associated with establishing relationships with a multitude of service providers. Unlike the prior art, where customers might choose any of a multitude of service providers, thus forcing billers to establish relationships with this multitude of service providers, the present invention allows a biller to enroll in a single ESP system and be assured that electronic statements will be delivered to those of its customers that desire electronic statements, regardless of the customer""s choice of financial institution.
A bank or other consumer service provider may also integrate such an electronic statement delivery from a biller into its own electronic home banking product in order to enhance that product and to provide more value to its consumer. In this fashion, a consumer may continue a relationship with his current bank, yet still be able to receive electronic statements from any biller from which the consumer receives a service. Alternatively, a consumer may choose any consumer service provider it desires that might provide electronic statements by way of the present invention. Thus, the present invention enhances the value of the consumer financial institution or consumer service provider in the eyes of the consumer.
The present invention is able to receive all electronic statements from a particular biller during a given billing cycle (for those customers that wish electronic statements) and then distribute those electronic statements to the appropriate consumer financial institutions for later delivery to the customers. Customers of a particular biller may use a variety of consumer financial institutions. Routing of the statements to the correct institution for eventual delivery to the customer is performed by the electronic statement presentment system. The task of contacting the consumer and providing the electronic statement in an appropriate medium is left to the consumer financial institution.
The consumer financial institution may then use any of a variety of means to transmit this electronic statement to the consumer. For example, any electronic home banking service that the consumer financial institution supports may be used to transmit the electronic statement to the consumer. Electronic means such as the Internet, telephones, video telephones, televisions, WebTV, personal digital assistants, or any other proprietary communication system may be used. For example, banks such as Bank of America and Citibank have their own proprietary systems for communicating with consumers. The consumer financial institution could even print and deliver the statements if it wished. By allowing a consumer financial institution to use its desired means of communication with a customer, and by integrating the ESP system into this desired means of communication, provides value to the consumer financial institution and to the consumer.
Furthermore, the present invention need not rely upon the Internet which may at times be slow, unreliable or less secure. Any electronic network may be used by the present invention to deliver statement information from a biller to provide an electronic statement to a consumer financial institution. In one embodiment, a private telecommunications EP-based intranet serves as a link to consumer financial institutions, such as a bank that provides electronic banking services for its customers.
Advantageously, the present invention may use any of a variety of data formats for transmitting an electronic statement. As one specific example, use of an Adobe PDF format has been shown to have desirable results. Furthermore, a template used to generate an electronic statement may contain any information, format or logo that the biller desires to send to the consumer. This allows a biller to continue using a similar format and style such as is presented on paper statements to maintain the same xe2x80x9clook and feelxe2x80x9d for the consumer. The present invention also makes a distinction between static information of a statement (such as biller information, logo, format information, etc.) and dynamic information that must be updated with each electronic statement for each customer (such as number of units used by a customer, amount of the invoice, changes in account status, change in consumer address, date, account history, etc.). In one specific embodiment, the static information is stored in the template, while the dynamic information is transmitted separately from the biller and combined later to generate the complete electronic statement or invoice. As the static information provides the bulk of the template, the present invention allows for the bulk of this information to be moved infrequently to lower telecommunications costs and to only transmit the dynamic information when a statement is being sent for a particular customer.
Thus, an electronic statement presentment system according to the present invention is not only able to operate independently and to provide value to billers, banks and consumers, but is also able to complete the circle for full electronic bill payments and presentments when used in conjunction with an electronic bill payment system. Electronic statement presentment systems implemented according to the invention provide convenience and cost savings to both billers and consumers as well as providing security and reliability.